Judge rejects Chinese firm’s lawsuit

A Chinese company that sued an Oregon nursery has had its lawsuit thrown out of court by a federal judge. The judge found that the Chinese company had ignored previous court orders to turn over evidence.

A federal judge has thrown out a Chinese company’s lawsuit against an Oregon nursery over a contract dispute.

The plaintiff, Asia Pacific Agricultural and Forestry Co., claimed that Sester Farms of Gresham, Ore., botched a $530,000 order for thousands of trees and didn’t include proper export certification.

Sester Farms countered that an agent of the Hong Kong-based company inspected and approved the trees prior to shipping, and that the trees were wrongly rejected. The nursery demanded $175,000 in compensation for costs it incurred from the rejected shipment.

U.S. District Judge Michael Simon recently dismissed Asia Pacific’s claims against Sester Farms, agreeing with a magistrate judge who found the Chinese firm had disobeyed court orders to turn over evidence.

To bolster its claims that Sester Farms shipped the wrong trees, Asia Pacific submitted a contract agreeing to resell the plants to a third party, the magistrate judge found.

Sester Farms claimed this contract was a forgery.

U.S. Magistrate Judge Paul Papak said the contract and claims about its authenticity “strongly suggest the possibility — but not the certainty — that the document was fabricated for purposes of this litigation.”

“That possibility is deeply troubling,” Papak said. “To permit the fabrication of spurious corroborating evidence without the imposition of a harsh responsive sanction would constitute an open invitation to abuse of the judicial system of the most egregious kind.”

The magistrate judge declined to declare the contract a fake without holding an evidentiary hearing, but said Asia Pacific’s claims should be dismissed on other grounds.

Despite two court orders, the Chinese company has not turned over relevant documents and answer questions posed by Sester Farms, the magistrate judge said.

Papak said that “Asia Pacific’s conduct in litigating this action has been egregious, amounting to failure to participate in any meaningful way in the discovery process.”

While the court could impose less severe sanctions, nothing short of dismissal would be a “sufficient, appropriate response to Asia Pacific’s dilatory conduct, repeated disobedience of court orders and repeated misrepresentations to the court,” he said.

Bruce Rubin, an attorney for Sester Farms, said the nursery's counterclaims against Asia Pacific remain live in the case.

Eric Helmy, an attorney for Asia Pacific, said the dismissal is “unfortunate” and is under review for a potential appeal.

“It’s a frustrating situation that has nothing to do with the merits of the case,” he said.